Correlation Between Moonpig Group and Dominos Pizza
Can any of the company-specific risk be diversified away by investing in both Moonpig Group and Dominos Pizza at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Moonpig Group and Dominos Pizza into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Moonpig Group PLC and Dominos Pizza Group, you can compare the effects of market volatilities on Moonpig Group and Dominos Pizza and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Moonpig Group with a short position of Dominos Pizza. Check out your portfolio center. Please also check ongoing floating volatility patterns of Moonpig Group and Dominos Pizza.
Diversification Opportunities for Moonpig Group and Dominos Pizza
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Moonpig and Dominos is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Moonpig Group PLC and Dominos Pizza Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dominos Pizza Group and Moonpig Group is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Moonpig Group PLC are associated (or correlated) with Dominos Pizza. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dominos Pizza Group has no effect on the direction of Moonpig Group i.e., Moonpig Group and Dominos Pizza go up and down completely randomly.
Pair Corralation between Moonpig Group and Dominos Pizza
Assuming the 90 days trading horizon Moonpig Group PLC is expected to generate 1.37 times more return on investment than Dominos Pizza. However, Moonpig Group is 1.37 times more volatile than Dominos Pizza Group. It trades about 0.05 of its potential returns per unit of risk. Dominos Pizza Group is currently generating about 0.0 per unit of risk. If you would invest 11,870 in Moonpig Group PLC on October 12, 2024 and sell it today you would earn a total of 7,710 from holding Moonpig Group PLC or generate 64.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Moonpig Group PLC vs. Dominos Pizza Group
Performance |
| Timeline |
| Moonpig Group PLC |
| Dominos Pizza Group |
Moonpig Group and Dominos Pizza Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Moonpig Group and Dominos Pizza
The main advantage of trading using opposite Moonpig Group and Dominos Pizza positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Moonpig Group position performs unexpectedly, Dominos Pizza can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Dominos Pizza will offset losses from the drop in Dominos Pizza's long position.| Moonpig Group vs. Infrastrutture Wireless Italiane | Moonpig Group vs. Zoom Video Communications | Moonpig Group vs. Ecclesiastical Insurance Office | Moonpig Group vs. Zegona Communications Plc |
| Dominos Pizza vs. Fortune Brands Home | Dominos Pizza vs. Home Depot | Dominos Pizza vs. Litigation Capital Management | Dominos Pizza vs. Synthomer plc |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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